Retail Sales Rose in August, Suggesting Recovery Across the Industry

Consumer activity saw a lift in August, thanks to a strong back-to-school shopping season and end-of-summer travel.

Retail sales were $618.7 billion in August, marking a 0.7% jump from July, according to a monthly report from the U.S. Census Bureau. Sales were up 15.1% compared to August 2020, with clothing and accessories sales up 38.8% year-over-year.

The bump comes after a 1.1% decline in July sales compared to June. The dip in July suggested impacts from the Delta variant and shipping and supply chain disruptions across the industry. Now, back-to-school shopping and the end-of-summer season have prompted an uptick in sales. And while concerns surrounding the Delta variant and inflation continue to persist, experts are optimistic about the industry’s road to recovery.

“Looking ahead, we maintain our view that retail will end the year on a very solid note,” said Neil Saunders, managing director of GlobalData, in a statement. “Growth will moderate over the coming months, but the consumer still has plenty of firepower to give retail a happy sendoff as we exit 2021.”

In general, port congestion and shipping disruptions have caused major headaches for brands and retailers this quarter. Freight rates have reached record highs amid pandemic-related shipping slowdowns, factory and store shutdowns, clogged ports and worker shortages. As a result, prices on certain items have increased. In the last month, prices appear to be leveling off.

According to the Bureau of Labor Statistics’ monthly report, consumer prices rose again in August by 0.3%, which was less than the 0.5% rise in July. This marked the lowest increase in prices since January’s 0.3% rise.

August’s small increase in prices combined with the spending increase points to positive signs for retail’s future. In a statement, the National Retail Federation said the increase in retail sales in August point to resilience in the industry.

“In spite of the ongoing challenges of the global pandemic, concerns about the delta variant, and supply chain and workforce constraints, the retail industry continues to do what it does best – serve customers and support communities while keeping team members and associates safe and healthy,” NRF president and CEO Matthew Shay said in a statement. “We maintain our confidence in the historic strength of consumers and fully expect a record year for retail sales and a strong holiday season for retailers.”

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